Paul Okaru (pictured on the far left). I recently attended the AfricaBusinessForum.com Investment meeting in Dubai on 23rd May 2015 where i met potential investors and business partners to work with in the future. I am an African Entrepreneur. My company ‘Sub-Sahara Africa Ventures Ltd’ is a specialist business and project development company based in London England that has a focus on West Africa with a core focus on Nigeria. We have demonstrated a track record of connecting parties with a mutual interest in the region through the utilisation of an extensive network of relevant contacts, spanning many sectors.
Key Strengths and Expertise
- Market entry strategy into Nigeria and other select countries in West Africa.
- Assisting with license / permit applications required to operate in Nigeria / select African countries
- Strong negotiation skills
- Market analysis: (political risk, commercial risk, risk mitigation, and competitor analysis)
- Legal / Commercial and reputational due diligence
- Multinational business strategy
- Reviewing / analysing contractual agreements
What we are looking for
We are in need of long term Investment partners to work with us to take advantage of the many opportunities that exist in Nigeria / West Africa.
Paul Okaru is the Managing Director of Sub-Sahara Africa Ventures Ltd and can be reached on his direct email: Paul@ssavltd.com or cell: +44 7979686845 office number: +44 1202898230
Challenging the perceptions that exist about Nigeria / Africa by Paul Okaru of Sub-Sahara Africa Ventures Ltd
Africa is a very large and diverse continent of at least 54 countries but when most foreign multinationals or businessmen first decide to consider doing some kind of business in Africa, usually they tend to view Africa as a country. In fairness to them this is partly as a result of the media which tends to label African countries together. For the informed businessman they are aware this is far from the reality.
For example within West Africa there is English speaking Nigeria with a legal system influenced by UK their former colonial master, but then you have French speaking Senegal influenced by the French and then you have Portuguese speaking Angola influenced by Portugal, all within West Africa. It is also worth pointing out that within most African countries themselves you find large differences in language and culture.
The situation in many African countries has changed as democracy is becoming more common place. Similarly countries with a history of military type dictatorships such as Nigeria are now led by civilian Presidents following multi-party elections. The reality is that most multinationals have tended to rely on very generic sources of information for assessing a countries situation, rather than conducting a proper detailed risk assessment which may reveal that even though a particular kind of risk exists it does not actually affect the industry which the multinational intends to operate in the country in question. Traditionally multinational corporations that have considered doing business in Africa have been very concerned about political and other related risks. This concern is in part due to reporting of political related conflicts by the western media. For example the events that followed the recent political disturbance in Burundi are reported, but the impression is that this is an African general event, but the reality is that it is happening in Burundi, one of many African countries.
The lesson for any foreign business intending to commit long term resources / investment to Africa is to distinguish real risk from perceived risk. Even if risk does exist in a particular African country, ask whether that particular risk affects your particular industry. It may be your activities are not likely to be affected by that particular risk. In any event there are facilities that exist today which include political risk insurance. It would be wise to speak to experts about ways to mitigate a particular risk that has been identified following a detailed analysis of proposed activities in a given country. Such analysis should take place in the proposed African country chosen as an investment destination, as one will get a much better picture of the situation in the chosen country.
We live in an interdependent world. What is good for Africa in business and economic growth may also be good for Europe, Middle East, Asia or America. What this means is Africa should be allowed to industrialise, prosper, and become independent and far less reliant on foreign aid. If more Africans become more prosperous and affluent, we could afford to buy more luxury goods produced from Europe, Middle East, Asia and America, which would be good for the economies of the developed world as they would have an ever increasing market for the products at the higher end of the market. However for this to happen we need goodwill both from foreign partners and from local players in the key African countries.
Before a multinational or foreign business decides to venture into Africa for the first time, it needs to be aware of the culture of the country it is interested in. Culture here refers to the business culture. For example in Saudi Arabia “Riba” may affect charging interest on a loan due to influence of Islam in that country. “Dash” a practise of giving somebody money without expecting anything in return in a Nigerian context may be seen as corrupt in Europe, especially where the “dash” is given to a key official.
Hence it is important to understand how the business culture of an African country may affect one’s chosen strategy. It is felt forming Joint Ventures with local African companies in some African countries is a good idea, as local partners provide valuable local inputs such as access to key contacts, business culture and the general business environment. This shows the importance of engaging a consultant with knowledge of a selected African country to conduct a proper due diligence tailored to the objectives and proposed activities of a foreign company in a chosen African country. Increasingly African countries such as Nigeria are introducing local content laws to encourage local indigenous companies to be more involved in different sectors of the economy and this needs to be considered when venturing into a selected country / industry.
Although it sounds rather simplistic any multinational or foreign business person seriously considering venturing into Africa for the first time needs to ask themselves if they are sincerely prepared to work in an environment that is not the same as exists in the developed world of Europe, America or parts of Asia. There are some African countries that offer political / economic stability with a relatively good infrastructure while others are making steady progress. But in many other countries one needs to be prepared for poorer infrastructure such as electric power failures, delay at ports and for clearing goods and bad roads. This has implications for the foreign investor in Africa as they need to consider there may be an extra cost associated with doing business in Africa, depending obviously on the country chosen.
The positive news is the infrastructure is improving in most countries. Recent success of the wireless mobile networks has helped ease communication problems which previously existed for business people in most African countries. The telecommunications companies that recognised these problems as opportunities were among the first to venture into the wireless telecommunications industry in Africa and have consequently reaped huge rewards. The key is for companies to see infrastructure limitations not so much as problems but as opportunities to be a first mover or early entrant into a particular industry. For example there is a demand for power generation in many African countries due to inadequate electricity supply, and so infrastructure limitation = opportunity for the early entrant / first mover in the energy industry of that particular African country. It is also a chance for a foreign investor to make a positive change in a given country and reap the rewards that go with being an early entrant into a market / industry.
Many African countries have also made efforts to reduce bureaucracy and make it easier to set up businesses in their respective countries. Investment climate facility (ICF) was set up for this purpose. Corruption needs to be avoided by foreign multinationals and anti-corruption included as part of their corporate code of ethics.
Foreign companies venturing into Africa should be aware of the regional trading blocks and incentives that exist within these blocks. Much like the current EU in Europe efforts are being made to move towards a common market within African regions such as the Southern Africa Development Community (SADC), Community of Eastern & Southern African States (COMESA) & Economic Community of West African States (ECOWAS). Businessmen are aware of the advantages they offer, including economies of scale. Also existing in Africa are Industrial Free Zones, which are really like the special economic zones of China. The industrial free zones offer many possibilities especially for the manufacturing industries.
Don’t let TV reports of unrest in one African country or within a country put you off investing in another country on the other side of the continent or in another part of the same country. Bare in mind African countries can be very large, for example DRC Congo is the size of Western Europe.
- Carry out a proper, detailed risk assessment.
- Distinguish ‘real’ risk from ‘perceived’ risk.
- If there is risk in a country of interest, carry out checks to establish whether this risk will
impact upon the specific industry in which the company is active.
- Speak to experts to mitigate a particular risk.
- Take into account infrastructure limitations within Africa.